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Thursday, 7 January 2016

Iran Weekly Market Report - 7 January 2016

Iran Weekly Market Report - 7 January 2016:

"Summary

Share prices on the Tehran Stock Exchange experienced increases for the second week in a row. The TSE All-Share Index gained 1.5% as it closed at 62,632 on Wednesday’s trading session. The TSE experienced its best performance for the last eleven weeks. After recording slight changes for several days, the TEDPIX had dramatic positive chang­es on Tuesday and Wednesday by adding 1.46%. This positive performance by the TSE has been in contrast to weak performances of global stock markets, as well as further declines in crude oil prices. Most of the major sectors on the Tehran Stock Exchange had promising performances and the majority of them closed in the green. Among the main sectors, the Automotive group was the best performing industry by adding 8.3%. Also, Oil Products and Chemicals sectors gained 3.5% and 1.2% respectively. However, Metallic Ores and Base Metals sectors were exceptions as their indices declined by 1.4% and 7.1% each. The interesting point about this week’s growth in the Tehran Stock Exchange was the broad positive records of various types of stocks in different sectors. 

 

Studying the All-Share Index through Technical Analysis perspective shows that the dra­matic growth during the last two days has already put the index above its 50 day EMA by almost 1%. Also, the change in direction by the index has been supported by the volume indicators due to expanding levels of trade volume in recent days. TEDPIX’s chart shows readiness to post signals to achieve higher measures, but first it needs to surpass its closest resistance level of 63,000.

 

Moreover, the index of the thirty largest companies by market capitalization, the TSE30 index, also recorded a positive performance of 1.8%, to close at 2,628. The TSE30 index regained its position above the 2,600 level after three weeks, due to its strong move in the first week of January. Among the listed shares under the TSE30 index, Iran Khodro (IKCO) had the highest gain by adding 8.9% to its share value, closing at IRR 1,701 (approx. USD 4.6 cents)."



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Etihad asks court for more time for disputed Air Berlin code shares | GulfNews.com

Etihad asks court for more time for disputed Air Berlin code shares | GulfNews.com:

"Etihad Airways has asked a German court for more time to continue code sharing with Air Berlin on 29 routes while it appeals a decision that will block it from operating the flights after January 15, it said on Thursday.

A court in Brunswick last week said Etihad may not continue to jointly sell tickets for 29 routes operated by Air Berlin, in which Etihad owns a 29 per cent stake, because they were not covered by the current air traffic rights agreement between Germany and the UAE.

The code shares are important for Air Berlin as it tries to return to profitability after years of losses. Such deals allow carriers to offer more destinations as part of their network, reaching more customers and thus helping to fill planes and boost revenues."



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UAE business conditions moving at slowest pace in 40 months | GulfNews.com

UAE business conditions moving at slowest pace in 40 months | GulfNews.com:

"The UAE’s non-oil private sector reported a slower growth in December 2015 with business conditions improving at the slowest rate in 40 months, according to the Emirates NBD UAE Purchasing Managers’ Index (PMI).

Data showed the PMI declined to its lowest level in over four years, with a reading of 53.3 in December 2015. While the PMI was still above the neutral 50 level that separates expansion from contraction, it points to slower growth in the UAE non-oil private sector."



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Sale of the century? | The Economist

Sale of the century? | The Economist:

"“THE amounts of oil are incredible, and I have to rub my eyes frequently and say like the farmer: ‘There ain’t no such beast.’” So wrote an American oilman in the Persian Gulf a few years after the discovery in 1938 of a gusher of oil from Saudi Arabia’s Well Number Seven, 4,727 feet (1,440 metres) below the desert floor.

You could say the same today about Saudi Aramco, the state-owned firm that for decades has had exclusive control of Saudi Arabia’s oil and is the world’s biggest, most coveted and secretive oil company. On January 4th the kingdom’s deputy crown prince, Muhammad bin Salman, told The Economist that Saudi Arabia was considering the possibility of floating shares in the company, adding that personally he was “enthusiastic” about the idea. It was a stunning revelation. Officials say options under preliminary consideration range from listing some of Aramco’s petrochemical and other “downstream” firms, to selling shares in the parent company, which includes the core business of producing crude. The staggered nationalisation of the Arabian American Oil Company (Aramco), made up of four big American firms, in the 1970s was emblematic of a wave of “resource nationalism” that has helped define the industry (see chart 1)."



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Transcript: Interview with Muhammad bin Salman | The Economist

Transcript: Interview with Muhammad bin Salman | The Economist:

"Muhammad bin Salman, Saudi Arabia’s deputy crown prince and the country's defence minister, spoke to The Economist on January 4th. As part of a five-hour conversation, he gave his first on-the-record interview, which we have transcribed below. Our briefing includes quotations from both this and the broader discussion. Our cover leader is available here and more analysis on a possible Aramco listing is here.

The Economist: Let’s focus first on the recent executions. Why did they take place now, so many years after the terrorist attacks in Saudi Arabia? And why did you include a prominent shia cleric?
Muhammad bin Salman: First of all, these were sentenced in a court of law with charges related to terrorism and they went through three layers of judicial proceedings. They had the right to hire an attorney and they had attorneys present throughout each layer of the proceedings. The court doors were also open for any media people and journalists, and all the proceedings and the judicial texts were made public. And the court did not, at all, make any distinction between whether or not a person is Shi’ite or Sunni. They are reviewing a crime, and a procedure, and a trial, and a sentence, and carrying out the sentence."



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Saudi Aramco: the key facts | Business | The Guardian

Saudi Aramco: the key facts | Business | The Guardian:

"• Saudi Aramco is likely to be worth well over $1tn (£685bn). At that level it would be worth more than Apple, ExxonMobil and Facebook added together.

• The world’s largest oil and gas company was originally formed in 1933, with the involvement of Standard Oil of California - now known as Chevron.

• The group was part-nationalised in 1950 and its headquarters moved from New York to Dharan in Saudi Arabia. Aramco was fully taken into state hands 30 years later where it has jealously and secretly guarded the country’s 260bn barrels worth of oil reserves, which are rich and easy to produce."



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Saudi Arabia considers Aramco share sale - FT.com

Saudi Arabia considers Aramco share sale - FT.com:

"Saudi Arabia is considering listing shares in state-owned Saudi Aramco, the largest oil producer, in a move that would be likely to create the most valuable listed company in the world.
Mohammed bin Salman, the kingdom’s deputy crown prince, said he was “enthusiastic” about launching an initial public offering of Saudi Aramco and a decision would be made “over the next few months”.  His comments to The Economist came as the world’s largest oil-exporting nation struggles to contain a burgeoning deficit of nearly $98bn following the oil price’s spectacular 70 per cent collapse over the past 18 months. The Saudi government recently unveiled spending cuts for this year, subsidy reforms and called for privatisations to rein in its widening deficit."



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How Low Can Oil Go Near Term? - Bloomberg Business

How Low Can Oil Go Near Term? - Bloomberg Business:

"Petrie Partners Chairman Tom Petrie weighs in on oil prices and production. He speaks on "Bloomberg Markets." (Source: Bloomberg)"



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MIDEAST STOCKS-Saudi leads Gulf down on oil slide, economy fears | Reuters

MIDEAST STOCKS-Saudi leads Gulf down on oil slide, economy fears | Reuters:

"Gulf stock markets fell sharply on Thursday, with Saudi Arabia plunging more than 4 percent and other major markets losing at least 3 percent, because of a fresh slide of oil prices and worries about the health of the regional and global economies.

Brent oil sank more than 4 percent to below $33 a barrel for the first time since April 2004. That was lower than many investors expected just a few days ago and if such prices persist, Gulf state finances will come under fresh pressure.

Saudi Arabia's 2016 state budget, released last week, projected an $87 billion deficit - assuming oil averaging about $40. Lower prices could force Riyadh to deplete its foreign reserves faster, adding to investor jitters."



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Saudi Aramco IPO

Saudi Arabia is considering a stock market listing for its national oil group – the world’s biggest energy company and probably the most valuable company on the planet. Saudi Aramco is a highly secretive organisation but is likely to be valued at well over $1tn (£685bn). Any public share listing would be viewed as a potent symbol of the financial pain being wreaked by low prices on the world’s biggest crude exporting country. Prince Muhammad bin Salman, the country’s highly influential deputy crown prince, confirmed in an interview with the Economist magazine, which took place on Monday, that a decision would be taken within months whether to raise cash in this way, even as oil company shares are depressed at this time.

Oil slides below $33 to near 12-year low as China turmoil rattles investors | Reuters

Oil slides below $33 to near 12-year low as China turmoil rattles investors | Reuters:

"Oil fell below $33 a barrel on Thursday for the first time since April 2004 as a fall in Chinese shares rattled investors already concerned by near-record production and massive stockpiles of unwanted crude and refined products.

Oil prices have fallen by around 70 percent since mid-2014, hurting oil companies and governments that rely on crude revenue.

China let its yuan currency slip on Thursday, sending regional currencies and stock markets globally tumbling. The offshore yuan fell to its lowest since trading started in 2010.

"



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Oil price crashes to $33 – and could go as low as $18 | The Week UK

Oil price crashes to $33 – and could go as low as $18 | The Week UK:

"The sharp jump in the oil price to close to $39 a barrel on Monday, in the wake of the execution of a senior Muslim cleric in Saudi Arabia that prompted sectarian violence and a stand-off with Iran, seems like a long time ago.

Since the rally ran out of steam in the afternoon session on the first day of the week in New York, oil has been tumbling and yesterday, it crashed to the latest lows for more than a decade. The first milestone saw international benchmark Brent crude fall below $35 for the first time since 2004 in mid-afternoon in London, while in the overnight trading sessions in the US and Asia, it eventually hit a near 12-year nadir just above $32.

Traders have bucked the historic trend of buying into oil futures when Middle Eastern tensions rise because there is now a broad consensus the unrest is as likely to be a harbinger of greater oil supply, rather than less. Saudi Arabia and Iran are key members of the powerful Opec cartel and the diplomatic breakdown will surely prevent any harmony on policy to end the global oil glut."



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Dubai Stocks Lead Middle Eastern Slump as Oil Extends Decline - Bloomberg Business

Dubai Stocks Lead Middle Eastern Slump as Oil Extends Decline - Bloomberg Business:

"Dubai stocks led a decline in Middle Eastern markets amid a global equity rout and as the slump in oil prices deepened.
The DFM General Index retreated 3.4 percent, the most in almost two months, to the lowest level since Dec. 15. Saudi Arabia’s Tadawul All Share Index retreated 2.7 percent to 6,340.19 at 1:22 p.m. in Riyadh, the lowest level since December 2011 on a closing basis. The Bloomberg GCC 200 Index, a gauge that tracks the 200 largest stocks in the six-nation Gulf Cooperation Council, retreated for a fifth day to the lowest since January 2013.
Asian stocks and currencies slumped as data showed a weakness in manufacturing in China and the nation cut the yuan’s reference rate by the most since August, helping push crude closer to $30 a barrel. The GCC is home to about 30 percent of the world’s proven oil reserves, and its governments rely on energy revenue to help fund spending."



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MIDEAST STOCKS-Saudi tumbles more than 3 pct on oil, global downtrend | Reuters

MIDEAST STOCKS-Saudi tumbles more than 3 pct on oil, global downtrend | Reuters:

"Saudi Arabia's stock market tumbled again early on Thursday, hit by the plunge of oil to new 11-year lows and investor worries about the health of the regional and global economies.

Brent crude futures sank more than 4 percent to below $33 a barrel for the first time since April 2004. The Saudi equities benchmark fell 3.1 percent in the first 10 minutes of trade to new three-year lows; stocks were dumped across the board.

Saudi Basic Industries, the bourse's largest stock by market value, slid 5.3 percent."



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MIDEAST STOCKS-Dubai sinks more than 3 pct in early trade | Reuters

MIDEAST STOCKS-Dubai sinks more than 3 pct in early trade | Reuters:

"Dubai's stock index sank more than 3 percent in early trade on Thursday, hit by a global equities sell-off in response to market turmoil in China, as well as concern over a slowdown in Gulf economies.

The index was down 3.2 percent at 2,974 points after 12 minutes of trade. It has technical support at the December low of 2,851 points. Selling was indiscriminate, with blue chip Emaar Properties losing 3.9 percent.

Abu Dhabi's index dropped 1.8 percent, with real estate shares leading declines."



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Low energy markets | Authers' Note - YouTube

Low energy markets | Authers' Note - YouTube: ""



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How Opec divisions keep oil price low | FT Markets - YouTube

How Opec divisions keep oil price low | FT Markets - YouTube: ""



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Markets hit by China’s new 7% plunge - FT.com

Markets hit by China’s new 7% plunge - FT.com:

"Global equities are continuing their miserable start to 2016, sliding to three-month lows as another plunge for the Chinese stock market, more weakness in the renminbi and a fresh 11-year trough in oil prices rattle investors.
As risk appetite evaporates, pushing base metals sharply lower, traders are seeking the perceived safety of gold, the Japanese yen and “core” government bonds."



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Saudi Arabia: Can the country adapt to cheap oil? - BBC News

Saudi Arabia: Can the country adapt to cheap oil? - BBC News:

"Events of the last week in Saudi Arabia might not seem indicative of a government on the path to liberalisation. But when it comes to the economy, the oil rich kingdom is primed for reform.
The rising tension between Saudi Arabia and Iran has distracted attention from what was already becoming a fascinating story. In Riyadh there seems to be a quiet revolution underway in attitudes towards some of the fundamentals that have long underpinned Saudi Arabian society.
In December's budget we saw the first steps in a major economic reform plan, the rest of which is expected to be announced in January. The aim is to ensure political stability while the country adjusts to a much lower world oil price."



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